OVER 20 million bustling population, proximity to the shore and incessant industrial and commercial activities destine Karachi as a sweet spot for businesses. Colloquially dubbed as the “mother of shirtless”, this city has a lot to offer to aspiring entrepreneurs. Having said that, business in Karachi is not only the businessman’s business, there are many stakeholders ready to poke their noses for a host of bad reasons, making business ventures in Karachi a hard nut to crack.
As a small trader in Karachi, receiving calls from as far as Iran or South Africa for business protection is common. By paying a small informal tax, you can avoid arson, target killing and vandalism. Refusal often leads to threats, such as bullet casings or warning notices. Extortionists argue that if you already pay informal taxes, why not pay them too? Yes! Unfortunately, to run a successful business enterprise in Karachi, you already pay several informal taxes. The recipients are not always balaclava-worn, gun-toting friends. Instead, they are some well-dressed gentlemen doing illegal things legally.
The falling governance standards are evident in every sector of Karachi’s economy. In books, there are a lot of laws to discipline you. The legal, regulatory or tax machinery is complex and intentionally left obscure, so unscrupulous public functionaries keep greasing their palms. Labour inspectors knock at your doors, not to enforce labour laws, but to get their pound of flesh from the emaciated bodies of the labourers. Tax officials may care more about their belly fat rather than revenue collection. The malpractices have emboldened dishonest businesses to milk maximum profits only to share their spoils with the relevant quarters. Welcome to the cult! Rest, keep coughing up the informal taxes to evade the thick end of the law.
To add insult to injury, the depleting infrastructure of Karachi is unconducive to cater to such a large economy. Unreliable utilities, transport and energy supplies are unbecoming of a mega city. A common survival theme for the traders in Karachi is to be thick-skinned and know the art of manoeuvring. Business in Karachi is not an enterprise for the faint-hearted. You must have a very good idea of who is who and what is what. Connections matter as much as hard work.
This catch-22 situation has led to increased reverse urban migration, stripping Karachi of its former pride. Businesses moving northward undermine national economic competitiveness, as coastal locations are optimal for production. This shift increases logistical costs, making the economy less competitive. Some business owners, fed up, are relocating offshore with their capital, resulting in massive job losses.
Extraordinary circumstances require extraordinary measures. We cannot afford the law of the sword in a megacity. a functional mass transit, infrastructural, energy and governance infrastructure minus corrupt practices are prerequisites for businesses. Taxes are paid to expect these basic services from the state. The once fuming economic engine is rapidly falling as a sick man of Pakistan. Things cannot run awry in the long run. We need to act. Lest Karachi should resonate with poet Parveen Shakir’s analogy of this city as a whore.
—The writer is a Karachiite and social analyst.
